Fletcher

Marbury v. Madison merely held that the Supreme Court need not enforce an unconstitutional grant of power to the Court itself. How far did this power go? Could the court declare state laws unconstitutional? By overturning unconstitutional State decisions? By sanctioning civil suits against state officers who violate the Constitution?

In Fletcher v. Peck (1810), the Court ruled that a state statute violated the Constitution's Contract clause. In 1795, the Georgia legislature granted 3.5 million acres of land at a very low price. Fletcher traced his title to some of that land back to the 1795 grant. The Georgia legislature in 1796 rescinded that grant on the grounds that the grant had been obtained by bribery: all but one of the 1795 legislators had had a financial interest in the grant. In a diversity suit, that is between citizens of different states, the federal courts assumed jurisdiction over a challenge to Georgia's attempt to annul the deed to Fletcher and others. Under the common law, fraud could be used to annul a transaction between the original parties to the transaction. But if a third party gave value for the land in good faith without notice of the fraud, then under the common law the transaction could not be set aside. Fletcher argued that the Georgia legislature's act violated his contract of purchase and hence the Constitution's protection against state interference with the sanctity of contracts.

"If a suit be brought to set aside a conveyance obtained by fraud, and the fraud be clearly proved, the conveyance will be set aside, as between the parties; but the rights of third persons, who are purchasers without notice, for a valuable consideration, cannot be disregarded. Titles which, according to every legal test, are perfect, are acquired with that confidence which is inspired by the opinion that the purchaser is safe. If there be any concealed defect, arising from the conduct of those who had held the property long before he acquired it, of which he had no notice, that concealed defect cannot be set up against him. He has paid his money for a title good at law, he is innocent, whatever may be the guilt of others, and equity will not subject him to the penalties attached to that guilt. All titles would be insecure, and the intercourse between man and man would be very seriously obstructed, if this principle be overturned."

"Since, then, in fact, a grant is a contract executed, the obligation of which still continues, and since the constitution uses the general term contract, without distinguishing between those which are executory and those which are executed, it must be construed to comprehend the latter as well as the former. A law annulling conveyances between individuals, and declaring that grantors should stand seized of their former estates, notwithstanding those grants, would be as repugnant to the constitution as a law discharging the vendors of property from the obligation of executing their contracts by conveyances. It would be strange if a contract to convey was secured by the constitution, while an absolute conveyance remained unprotected."

All this is well and good. But what gave the Supreme Court the right to push the State legislature of Georgia around. The Court's power over the Georgia legislature, to declare its laws unconstitutional in a direct action was controversial.

A dissenting Justice was troubled by the Court's invasion of the state legislature's prerogatives:

"So if a law be in opposition to the constitution; if both the law and the constitution apply to a particular case, so that the court must either decide that case conformably to the law, disregarding the constitution; or conformably to the constitution, disregarding the law; the court must determine which of these conflicting rules governs the case. This is of the very essence of judicial duty. If, then, the courts are to regard the constitution and the constitution is superior to any ordinary act of the legislature, the constitution, and not such ordinary act must govern the case to which they both apply."

I enter with great hesitation upon this question, because it involves a subject of the greatest delicacy and much difficulty. The states and the United States are continually legislating on the subject of contracts, prescribing the mode of authentication, the time within which suits shall be prosecuted for them, in many cases affecting existing contracts by the laws which they pass, and declaring them to cease or lose their effect for want of compliance, in the parties, with such statutory provisions. All these acts appear to be within the most correct limits of legislative powers, and most beneficially exercised, and certainly could not have been intended to be affected by this constitutional provision; yet where to draw the line, or how to define or limit the words, "obligations of contracts," will be found a subject of extreme difficulty. To give it the general effect of a restriction of the state powers in favor of private rights, is certainly going very far beyond the obvious the obvious and necessary import of the words, and would operate to restrict the states in the exercise of that right which every community must exercise, of possessing itself of the property of the individual, when necessary for public uses; a right which a magnanimous and just government will never exercise without amply indemnifying the individual, and which perhaps amounts to nothing more than a power to oblige him to sell and convey, when the public necessities require it.

The majority, however, believed that the right to strike down a state law interfering with contracts was inherent its right to enforce the constitution:

The constitution, as passed, gave the courts of the United States jurisdiction in suits brought against individual states. A state, then, which violated its own contract was suable in the courts of the United States for that violation. Would it have been a defense in such a suit to say that the state had passed a law absolving itself from the contract? It is scarcely to be conceived that such a defense could be set up. And yet, if a state is neither restrained by the general principles of our political institutions, nor by the words of the constitution, from impairing the obligations of its own contracts, such a defense would be a valid one. This feature is no longer found in the constitution; but it aids in the construction of those clauses with which it was originally associated."

Fletcher v. Peck, thus establishes the Court's power to adjudicate private party challenges to unconstitutional state laws. But what if a State Court refuses to declare a law unconstitutional, or itself renders an unconstitutional decision.